Baig says, in what he terms the “year of the tanker”, that 50 VLCCs are expected to be recycled this year, with 25 already dispatched for beaching.

The managing director of Mideast says Pakistan, which has returned to tanker recycling after an 18-month ban, can scrap 10 or 11 VLCCs this year. It has already taken six and has capacity for possibly four or five more.

Bangladesh is already full and India, which has already received at least eight VLCCs, can only handle two or three more this year.

India and Bangladesh gorged on tonnage during the wet ban in Pakistan.

Given a recycling yard is booked up for a minimum of about seven months to dismantle a VLCC, Baig tells TradeWinds that a capacity crunch could be looming. Special facilities are needed, limiting the number of potential VLCC end users.

“Once Pakistan is full, what then happens?” asks the Dubai-based intermediary between seller and recycler. "We will see a correction in prices for VLCCs.”

Pakistan is currently paying upwards of $435 per ldt, but Baig reckons it could come down to $410 per ldt after the monsoons.

However, he says recyclers should be busy up to 2020 because of the volume of tankers likely to be torched.

Driving the market are new, upcoming ballast water and sulphur emissions regulations. Many owners will not bear the cost and instead are scrapping early. Baig forecasts that plenty of tankers built in the 1980s and early 1990s will be recycled in the months ahead.

He brushes aside the impact of the Chinese government's plans to ban the import of foreign-flag ships for demolition from the end of this year.

Cash buyers have not purchased ships for recycling in China for a very long time. The price difference with the Indian subcontinent is typically $100 per ldt.

He says if yards do not upgrade to meet the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships and become class compliant, sooner or later they may be prevented from beaching vessels.

“Everyone has to follow,” Baig says.

Recyclers in Pakistan must be ISO-approved during the next six months or face closure. The cash buyer says Bangladesh is playing catch-up but is slowly improving.

Quizzed on the pending European Ship Recycling Regulation, which will restrict scrapping of European Union-flag vessels to a list of approved yards, Baig predicts that many owners will simply sidestep the rules by reflagging.

He says European owners still want “top dollar” for their superannuated tonnage.

But now is the time for owners to pay for yards' investment in green recycling, especially in India where there are claimed to be about 25 such facilities.

“The end users have invested and are now saying ‘where are the ships?’” Baig says.

He does not envisage shiprecycling on any scale migrating to other countries because it is labour intensive and wages remain low in the subcontinent.

Baig says, in what he terms the “year of the tanker”, that 50 VLCCs are expected to be recycled this year, with 25 already dispatched for beaching.

The managing director of Mideast says Pakistan, which has returned to tanker recycling after an 18-month ban, can scrap 10 or 11 VLCCs this year. It has already taken six and has capacity for possibly four or five more.

Bangladesh is already full and India, which has already received at least eight VLCCs, can only handle two or three more this year.

India and Bangladesh gorged on tonnage during the wet ban in Pakistan.

Given a recycling yard is booked up for a minimum of about seven months to dismantle a VLCC, Baig tells TradeWinds that a capacity crunch could be looming. Special facilities are needed, limiting the number of potential VLCC end users.

“Once Pakistan is full, what then happens?” asks the Dubai-based intermediary between seller and recycler. "We will see a correction in prices for VLCCs.”

Pakistan is currently paying upwards of $435 per ldt, but Baig reckons it could come down to $410 per ldt after the monsoons.

However, he says recyclers should be busy up to 2020 because of the volume of tankers likely to be torched.

Driving the market are new, upcoming ballast water and sulphur emissions regulations. Many owners will not bear the cost and instead are scrapping early. Baig forecasts that plenty of tankers built in the 1980s and early 1990s will be recycled in the months ahead.

He brushes aside the impact of the Chinese government's plans to ban the import of foreign-flag ships for demolition from the end of this year.

Cash buyers have not purchased ships for recycling in China for a very long time. The price difference with the Indian subcontinent is typically $100 per ldt.

He says if yards do not upgrade to meet the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships and become class compliant, sooner or later they may be prevented from beaching vessels.

“Everyone has to follow,” Baig says.

Recyclers in Pakistan must be ISO-approved during the next six months or face closure. The cash buyer says Bangladesh is playing catch-up but is slowly improving.

Quizzed on the pending European Ship Recycling Regulation, which will restrict scrapping of European Union-flag vessels to a list of approved yards, Baig predicts that many owners will simply sidestep the rules by reflagging.

He says European owners still want “top dollar” for their superannuated tonnage.

But now is the time for owners to pay for yards' investment in green recycling, especially in India where there are claimed to be about 25 such facilities.

“The end users have invested and are now saying ‘where are the ships?’” Baig says.

He does not envisage shiprecycling on any scale migrating to other countries because it is labour intensive and wages remain low in the subcontinent.